Bitcoin tax payments bite the dust

By October 12, 2019 Bitcoin Business
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Mike Caldwell, a 35-year-old software engineer, holds a 25 Bitcoin token at his shop in Sandy, Utah.

Ohio is discontinuing a program launched in 2018 that allows Ohio businesses to pay their taxes using the cryptocurrency Bitcoin.

Fewer than 10 people had availed themselves of the cryptocurrency payment option created by former state treasurer Josh Mandel.

Mr. Mandel’s successor, Treasurer Robert Sprague, raised questions about the legality of the way was established, which he asked Ohio Attorney General David Yost to investigate. Such concerns should have been investigated by Mr. Mandel before he created the portal.

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Instead, officials were eager to make Ohio the first state to adopt a program that seems to be, at best, a novelty and, at worst, a troublesome gimmick. What’s more, it wasn’t as if there was any real demand for such a service, considering how few taxpayers used it.

The site was managed by the site’s vendor, Bitpay, which charged taxpayers a 1 percent commission fee to pay Ohio taxes with cryptocurrency. The rate is less than the 2.5 percent fee for taxpayers using a credit card for tax payments.

Mr. Sprague, who expressed enthusiasm for Mr. Mandel’s plan when he was campaigning to replace him last year, now says he believes the third-party vendor contract probably should have been put up for competitive bid.

Responding to Mr. Sprague’s concerns, the Ohio Board of Deposit, which oversees the state’s banking and financial processes, voted to shut down the cryptocurrency payment portal. Taxpayers who look for it online will be directed to the treasurer’s main website instead.

Mr. Sprague says he’s open to researching a potential replacement pay portal for virtual currency. If so, his office should thoroughly investigate the potential payment option, including whether taxpayers would use it. Also, the treasurer’s office should put the project up for competitive bid to get the best deal.

Running a state treasurer’s office and collecting Ohio’s taxes is critical — if not always flashy — work. What’s important is doing a good job at that work, not looking for new glamorous, high-tech programs no one needs.

Fewer than 10 people had availed themselves of the cryptocurrency […]

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